modifictions to truck

[oceanlovin'ea]

Client purchased a new truck to use in his business. He had to have modifications done so that he can carry materials in the back of the truck. Total of around $1300.00. Is this added to the asset value of the truck? and then the whole amount is what is used for the basis of depreciation?

Linda, EA

[Burke]

Yes, that is correct. Applies regardless if you are using regular depreciation or 179.

[ATSMAN]

Is this modification a permanent change to the truck?

I have a client who does plowing and he has one of those sanders that sits on the truck bed even during summer time. It is not a permanent modification to the truck but bolted on. Separate assets on the book.

[Burke]

I had a client who bought a regular van and had it completely modified with storage to carry supplies in the course of operating his business. It was outfitted with racks, etc, name of company painted on the side, even the two back doors had racks installed. He often performed his services on site using the contents of his van. He was audited for the 179 write-off of the cost of the van and its improvements, and it passed muster with absolutely no change. It was not booked at two separate assets.

[ATSMAN]

That clearly is a permanent modification in my opinion. I agree with your position.